Government might include non-food items under FDI in food retail

Food Processing Minister Harsimrat Kaur Badal has recently pitched for permitting sale of non-food items under the recently allowed policy of 100 per cent FDI in retailing of food products produced and manufactured in India.

Under the current foreign direct investment (FDI) policy, retailing of only food products produced and manufactured in India are permitted to foreign players, who want to set up stores in India.

The move looks significant as the industry has been asking for changes in the current FDI policy from some time now. Retailers had lobbied for relaxation on these lines as selling food alone wouldn’t make business sense and they needed to be allowed to offer more to shoppers.

Under the current foreign direct investment (FDI) policy, retailing of only food products produced and manufactured in India are permitted to foreign players, who want to set up stores in India.

As per a PTI report: The government is considering allowing stores which would attract FDI to sell personal and home care products up to 25 per cent of their total turnover.

“The ministry has sent a request that a foreign investor should be allowed to keep non-food items in their stores if they invest a certain percentage in creating “farm gate infrastructure”. Since people want some non-food items should be allowed, that is a call the Cabinet will take,” Harsimrat Kaur Badal, Food Processing Industries Minister, was quoted as saying by PTI.

She also said that the new FDI policy for food processing would positively impact the farmers.

“Since the FDI policy on processed food products announced, whichever country I have visited in last 2-3 months, every country has shown a lot of interest,” she said.

“We play an important role in global market. Our food sector, which has 65 per cent share in the USD 600 billion retail market, is set to treble by 2020. Rapid urbanization, growing middle class, no country can ignore us.

“This is a growing economy while many countries have reached their peak. Every country is interested in India to invest. There is a need to talk to them as the impression due to corruption during 10 years of UPA that it is difficult to work in India,” Badal told PTI.

Badal also said that the companies are requesting to help in finding local partners.

“So, we have decided to organise a global food exhibition to enable them find partnerships here. Be it processing, packaging, even with farmers, the partnerships can be forged,” she said.